Cloud-based tech productivity could add billions to economy

Another $7.8 billion could be added to the country’s annual GDP through improved productivity if 20 percent more businesses took on cloud-based tech, a report says.

The Xero-commissioned report by economic consultancy NZIER showed a 20 percent increase in the number of businesses using online tools for tasks such as stocktaking and payroll would give businesses more time to focus on growth and better management.

Xero country manager Bridget Snelling said New Zealand lagged behind the top performers in digitalisation, ranking 27th out of 63 countries compared, and needed to catch up.

“Economies around the world are rapidly digitalising and businesses in Aotearoa need to recognise the risk being left behind,” she said.

“The government needs to do everything it can to support our digital progress. In an election year, this should be a priority for all parties.”

Snelling said digitalisation had upfront costs, but the payback period for businesses was typically less two to three years before they began to see positive returns.

“In as little as two years we can help rejuvenate the economy, potentially adding billions of dollars through the improved productivity delivered by the increased uptake of digital tools,” she said.

The report held up Denmark and Singapore as key examples of government investment driving digitalisation progress in the economy.

“We know digitalisation is a key factor for improving productivity, giving businesses the tools they need to thrive in the modern era,” Snelling said.

The report outlined a road map for the government to invest in digitisation, suggesting an integrated digital public service system and appointing a chief technology officer to support businesses to use digital options.

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